BlinkSync

To save money on groceries, consumers are clipping coupons and switching to generic brands

For most households, groceries are the second highest monthly expenditure after housing, and thus a category where price growth can’t be ignored. While demand for groceries in general is relatively inelastic, the category’s hundreds of subcategories — some essential and some discretionary — offer plenty of opportunities for consumers to buy less overall or opt for cheaper alternatives. To make ends meet, consumers are comparing prices, buying generic products and clipping coupons.

Millennials are less likely than Gen Xers and baby boomers to say they have cut back on grocery purchases. Members of the former cohort are the most likely to have children living at home, so they may feel like they have little wiggle room to cut back. In addition, millennials are more likely to say they are cutting back on restaurants to save money, which might necessitate more grocery spending, or at the very least fewer cuts.

Efforts to save on apparel are led by women

Food and gas may dominate the inflation headlines now, but the apparel sector offers a good indicator of the trade-offs shoppers will soon face. Notably, women are more worried about inflation’s impact on apparel than men are (65% versus 59%). Women are also more likely to say they’ve tried to save money on apparel purchases in the past month, though they still report spending more on the category now than they were a year ago. Shoppers with annual household incomes between $50,000 and $99,999 are most likely to report trying to save on apparel “often.” Mid-tier earners’ frequent efforts to save are a reflection of their inability to absorb inflation’s impact as easily as higher earners — although they can still afford to do some shopping, as inflation hasn’t squeezed discretionary spending entirely out of their budgets.

Consumers from different generations are cutting back equally on entertainment

The shares of consumers across age groups who cut down on paying for entertainment experiences — going to a movie theater, theme park or concert — were virtually identical, though variation across income levels was as high as 10 percentage points. The low variance among generations is surprising given that younger consumers are more likely than their older counterparts to frequent venues like theme parks and movie theaters. But given that entertainment-related purchases aren’t essential like gas and groceries, consumer behavior in this category is still a lagging concern and likely won’t come to a head until the fall.

This finding reinforces how providers of entertainment experiences such as movie theaters and theme parks are far from out of the woods heading into the second half of the year. To soften the blow of more consumers potentially cutting down on entertainment experiences heading into the fall, businesses like movie theaters and live event venues should further experiment with digital opportunities such as movie screenings on gaming platforms like Roblox and digital versions of concerts (like Justin Bieber’s virtual concert) to attract additional revenue by way of sponsorships or merchandise sales.

Adults who have yet to make changes to save money are willing to do so if inflation continues to climb

While many consumers have already made a number of adjustments to help weather current economic conditions, those who haven’t are primed to do so if inflation continues to rise. A majority of adults said they were willing to cut back on all items we surveyed except groceries. For example, three-fourths of U.S. adults who said they did not delay purchasing electronics in the past month added that they are willing to do so if inflation intensifies, which could spell trouble for retailers this holiday season. Deals and discounts may not be enough to incentivize consumers to purchase these big-ticket items if economic conditions worsen.

ncG1vNJzZmiooqR7rrvRp6Cnn5Oku7TBy61lnKedZK6vrcuyqqKrX528uHnIp52lmaSevK95wqilnJ2io8BurdGeZKKloJawtbXNoGScp56owq6x0WaqqZ2embavsw%3D%3D